01—Abstract
Summary
Summary of the 10-K filed February 20, 2026. Cited figures are marked; the original filing is the authoritative source.
Kenvue Inc. reported net sales of $15.1 billiona for fiscal 2025, down $331 million or 2.1% from $15.5 billion in fiscal 2024, with organic sales decreasing 2.2% on volume declines of 2.3%.
Net income rose to $1.47 billionb from $1.03 billion, with diluted EPS of $0.76 versus $0.54, helped by lower impairment charges ($23 million versus $578 million in 2024). Operating income increased to $2.41 billion from $1.84 billion. Segment adjusted operating income declined 4.6% to $3.76 billion, led by a 21.4% drop in Skin Health and Beauty.
Operating cash flow was $2.2 billionc and dividends paid were $1.58 billion. The most significant development for investors is the pending Proposed Transaction with Kimberly-Clark. Under the November 2, 2025 Merger Agreement, each Kenvue share would convert into 0.14625 shares of K-C common stock plus $3.50 in cash.
Kenvue shareholders approved the deal on January 29, 2026, and the HSR waiting period expired on February 4, 2026. Closing is expected in the second half of 2026, subject to foreign regulatory approvals. Kenvue's current shareholders are expected to own about 46%d of the combined company.
The Strategic Review Committee was discontinued effective February 18, 2026, and the Company is restricted from share repurchases without K-C's consent. Key risks include acetaminophen labeling and litigation developments, talc-related claims outside the United States and Canada, phenylephrine litigation, and customer concentration, with one customer accounting for about 12% of Net sales and the top 10 customers about 41%. The Board approved a new restructuring initiative on February 17, 2026, expected to produce pre-tax charges of about $250 million in fiscal 2026.
02—Key points
Key Highlights
- Net sales of $15.1 billion in fiscal 2025, down 2.1% from $15.5 billion; organic sales declined 2.2%, driven by a 2.3% volume decrease.
- Net income of $1.47 billion (diluted EPS $0.76) versus $1.03 billion (EPS $0.54) in fiscal 2024, aided by impairment charges falling to $23 million from $578 million.
- Pending merger with Kimberly-Clark: each share converts into 0.14625 K-C shares plus $3.50 cash; shareholders approved on January 29, 2026, and the HSR waiting period expired February 4, 2026; closing expected in the second half of 2026.
- Skin Health and Beauty segment adjusted operating income fell 21.4% to $477 million, with a $68 million... (see note) goodwill headroom of about 10% after a 2025 interim quantitative test.
- Acetaminophen (Tylenol) litigation and FDA labeling actions, plus oral phenylephrine removal proceedings, could depress sales of affected products and increase litigation risk.
- Operating cash flow of $2.2 billion and cash dividends paid of $1.58 billion; total debt of $8.52 billion at year-end 2025.
- New restructuring initiative approved February 17, 2026, expected to incur pre-tax charges of about $250 million in fiscal 2026; the 2024 multi-year program delivered annualized gross savings above $350 million.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2025, Kenvue kept $0.10.
- Revenue$15.12B100.0%
- Cost of revenue−$6.33B41.9%
- Gross profit$8.79B58.1%
- Operating costs−$6.38B42.2%
- Operating income$2.41B16.0%
- Interest, other & tax−$944.0M6.2%
- Net income$1.47B9.7%
Where FY2025 revenue went
$15.12B- Cost of revenue: $6.33B, 42% of revenue
- SG&A: $6.09B, 40% of revenue
- Net income: $1.47B, 9.7% of revenue
- R&D: $382.0M, 2.5% of revenue
- Interest, other & tax: $944.0M, 6.2% of revenue
Kept 9.7% as net incomeNet income $1.47B · 9.7%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2025filed February 20, 2026Financial Statements
FY2025 against FY2024
| Line item | FY2025FY2024 | Change |
|---|---|---|
| Revenue | $15.12B$15.46B | −2.1% |
| Cost of Revenue | $6.33B$6.50B | −2.5% |
| Gross Profit | $8.79B$8.96B | −1.9% |
| R&D Expenses | $382.00M$408.00M | −6.4% |
| SG&A Expenses | $6.09B$6.33B | −3.8% |
| Operating Income | $2.41B$1.84B | +31.1% |
| Interest Expense | $430.00M$431.00M | −0.2% |
| Net Income | $1.47B$1.03B | +42.7% |
| EPS (Basic) | $0.77$0.54 | +42.6% |
| EPS (Diluted) | $0.76$0.54 | +40.7% |
| Shares Outstanding (Basic) | 1.92B1.92B | +0.1% |
| Shares Outstanding (Diluted) | 1.92B1.92B | +0.1% |
05—Questions
Frequently Asked Questions
What happens to Kenvue shareholders if the Kimberly-Clark merger closes?
Each share of Kenvue common stock will be converted into 0.14625 shares of Kimberly-Clark common stock plus $3.50 in cash. The stock portion is fixed, so its market value will fluctuate with K-C's share price. Kenvue shareholders are expected to own about 46% of the combined company on a fully diluted basis.
Why did net income increase despite lower sales?
Net income rose to $1.47 billion from $1.03 billion mainly because impairment charges fell to $23 million from $578 million, and Selling, general, and administrative expenses decreased $241 million, or 3.8%. Gross profit margin also expanded 10 basis points to 58.1%.
What are the main litigation and regulatory risks disclosed?
The filing discusses acetaminophen-related product liability suits and a Texas Attorney General action, an FDA label-change process for acetaminophen, and talc-related claims outside the United States and Canada, which are not covered by J&J's indemnity. It also describes phenylephrine class actions and an FDA proposed order to remove oral phenylephrine from the OTC monograph.
Can Kenvue continue buying back shares and paying dividends?
Kenvue is not permitted to repurchase shares without K-C's written consent under the Merger Agreement, and no shares have been repurchased since signing. The Company stated it expects to continue paying quarterly dividends, with the Board declaring $0.2075 per share on January 28, 2026, though dividend declarations remain at Board discretion.
06—Continue